President Museveni has put a temporary halt to the sale of the Pearl of Africa Hotel, previously known as Aya, which is indebted to the Industrial Development Corporation of South Africa to the tune of Shs647 billion. In a letter dated May 1, President Museveni addressed the Industrial Development Corporation, expressing the need to delay the auction to facilitate a meeting with the South African representatives.
President Museveni indicated that Mohammed of Aya Investment (U) Ltd Group had approached him concerning the impending sale of the hotel, which was approved by the court in favor of the Industrial Development Corporation of South Africa. He emphasized that the Pearl of Africa Hotel is a significant investment supported by the government through land allocation and other benefits, and thus, the government intends to intervene to settle the debt instead of proceeding with the auction. Museveni directed that the auction be paused until a meeting with the South African company could be arranged, instructing his principal private secretary to organize this meeting within the month.
As of the previous evening, it was uncertain if the meeting between President Museveni and the South African company had taken place. Timothy Kanyerenzi Masembe, the managing partner of MMAKS Advocates, which represents the South African company, confirmed the authenticity of the President's letter but declined further comment due to client-advocate confidentiality.
The auction, scheduled for May 3, was to be conducted by Armstrong Limited, the appointed bailiffs, on behalf of the lender and the law firms MMAKS Advocates and ENSafrica. The debt owed by Aya Investment had escalated from Shs316 billion to Shs647 billion over the years.
Background:
From August 13, 2007, to April 21, 2017, Aya Investments (U) Limited and the Industrial Development Corporation of South Africa entered into multiple Financial Credit Agreements to fund the development of the Pearl of Africa Hotel on Nakasero Hill in Kampala. A total of $81,765,318 (Shs305.6 billion) was disbursed across 20 instances under six Financial Credit Agreements. However, a dispute arose due to Aya Investments' failure to comply with the terms of these agreements, resulting in numerous legal battles and the eventual auctioning of the hotel.